Friday, January 26, 2001
EU to probe music companies over CD prices (2)

"...The European Commission said on Friday it was investigating whether the world's five biggest music companies were colluding with retailers over the price of compact discs (CDs) sold in the European Union. It named the companies at the center of the probe as EMI Group Plc, Bertelsmann's BMG unit, Warner Music, Sony Corp. and Universal.

"I can confirm that the European Commission is investigating the vertical relationship, that is the contracts between the world's largest record companies and retailers, to see whether the record companies are pursuing the same or similar retail sales practices in Europe. This has been triggered by the similar investigation in the United States last year. The Federal Trade Commission (FTC) investigated the same companies on the same count and there was a settlement. At this stage we have no evidence whatsoever that the companies are guilty of anti-competitive practices in Europe" Amelia Torres, spokeswoman for European competition commissioner Mario Monti, told reporters.

Torres said the Commission, the European Union's anti-trust authority, had written to the five companies and to five online and 13 traditional retailers for information. She said it would be several months before the Commission was in a position to draw any conclusions. The Commission has the power to fine companies found guilty of price fixing by up to 10 percent of their turnover, although it has never levied such a hefty fine on a single firm.

European consumers' organization BEUC welcomed the EU inquiry. BEUC legal adviser Machiel van der Velde said there were suspicions the five music companies used their market power to prevent retailers from selling below recommended prices, or from importing from cheaper markets. "It's this kind of pressure which is hearsay, but hopefully the EU with its investigation will come up with an answer and we are very interested in developments" van der Velde said..."